State health exchange still broken, Oregon looks to join feds

Oregon state officials are ready to hand off their disastrous Obamacare website to the federal government — a concession backed by the governor that the state won’t be able to operate the website on its own any time soon.

Oregon is the first state to give up technological control of its Obamacare website and join the federal exchange, an irony considering how busted HealthCare.gov was six months ago.

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As recently as 2013, Oregon was expected to have one of the best Obamacare exchanges in the country. But it never managed to get the website to work properly. Residents could not enroll in the Cover Oregon exchange on their own. They needed to use paper or get the help of an insurance broker.

Alex Pettit, the state’s information technology officer, made the recommendation to go to the federal exchange at an exchange advisory board meeting on Thursday. He told the panel that repairing the state’s site would cost about $78 million, which was deemed to be too much, take too long and be too risky. But switching to the federal system would cost between $4 million and $6 million, he said.

The plan would allow Oregon to still do front-end customer outreach, initial management of private insurance plans and some oversight of the plans. The state would also handle Medicaid enrollment — at an unknown cost to the state and the federal government.

The federal government would handle the rest — including the massive responsibilities behind the exchange technology.

The full Cover Oregon board will get the recommendation tomorrow and plans to vote.

The future appears to be set. The idea was first floated late last year and Gov. John Kitzhaber has accepted that it’s the best option now. The state had to make a decision this month in order to be ready for the 2015 enrollment period, which starts in November 2014.

“The IT Committee did good work - they looked at a dozen different technical options to get a website up and running for Oregonians,” Kitzhaber said in a statement to POLITICO. “I think their recommendation to use the federal website technology is the right call. It is the most reliable and least costly way to ensure that we have a working website for the next enrollment period.”

The federal government is already operating the exchanges in 36 other states. The health law encouraged states to run their own exchanges but the federal HealthCare.gov portal ended up serving the exchanges in far more states than anticipated after many conservative states refused to implement Obamacare.

“CMS is committed to working closely with states to support their efforts in implementing a Marketplace that works best for their consumers,” CMS spokesman Aaron Albright said. “We are working with Oregon to ensure that all Oregonians have access to quality, affordable health coverage in 2015.”

Because of the problems with Cover Oregon, the state was given a waiver to allow people to sign up through April 30. As of this week, the state has recorded 370,000 sign-ups – and 243,000 have come through Cover Oregon, according to the governor’s office.

Critics of Cover Oregon question the taxpayer dollars that have been spent on the inoperable website.

“Cover Oregon is the digital equivalent of the 1962 Columbus Day storm,” said Rep. Greg Walden (R-Ore.). “It is the worst financial failure in information technology in state history—and it was completely avoidable. Today’s admission of failure underscores the need to stop the waste and get the truth.”

Walden called for a federal investigation into the site earlier this year, and the state’s two Democratic senators – Ron Wyden and Jeff Merkley – issued a similar request soon after.